Vaaldiam Reduces Costs and Defers Brauna Payment
8/4/2011 5:11:09 PM - Market Wire
TORONTO, ONTARIO, Aug 04, 2011 (MARKETWIRE via COMTEX News Network) --VaaldiamMining Inc. ("Vaaldiam" or "the Company") (TSX: VAA) reports that itdid not make the installment of US$1.5 million which became due todayunder the previously announced March 2011 agreement with its jointventure partners in the Brauna project under which the Company increasedits interests in the Brauna project from 20% to 51%. Vaaldiam is indiscussions with its partners to seek a mutually acceptable arrangementfor addressing this payment.
In March 2011, Vaaldiam agreed withits joint venture partners in the Brauna project that it would undertaketo make three installments totalling approximately US$6.5 million aspart of the transaction consideration to acquire the additionalinterest. The first installment of approximately US
.9 million was paidon execution of the agreement; a second installment of US$1.5 millionwas due on August 4, 2011, and the remainder is due on June 4, 2012.
Inthe second quarter of 2011, global events have combined to reduceinvestors' appetites for risk: the earthquake in Japan, the Europeandebt crisis, slowing growth in the U.S. and China, and now increasinguncertainty about downgrades to the United States debt rating, allcontributed to increased risk aversion. As such, the Company is reducingcosts where possible and also delaying expenditures until the marketsfor junior resource equities and its non-core assets improve.
VaaldiamCEO Robert Jackson said, "The junior resource sector is characterizedby periods of extreme variability in terms of capital availability andthe key success factor for junior companies in periods such as this isto reduce costs and survive until capital is available again. Vaaldiamis currently pursuing this strategy."
The Company has cash on handof approximately $4 million, owns marketable securities valued atapproximately $1.7 million, owns 18.55% of Flemish Gold Corp. (a privatecompany with gold properties in eastern Africa) and royalty rights inthe Kwale project in Kenya and the Pukaqaqa project in Peru.